THE neighborhood streets are quiet, except for the sound of a lone lawnmower. Houses are empty, with boarded-up windows, sagging roofs, and peeling paint. Even on a balmy August evening, few signs of life are apparent in this 1950s-style housing development known as Love Canal. But times are slowly changing for this notorious neighborhood built on a hazardous-waste site. In 1988, after a decade-long federal and state government cleanup effort, the state health commissioner declared that two-thirds of the mostly abandoned neighborhood was habitable.

This week, the first nine Love Canal homes were offered for sale since the area was declared a health emergency by the federal government in 1978. The Love Canal Revitalization Agency, the government agency that owns the houses, says it has a list of close to 250 potential buyers.

The houses for sale in the neighborhood - renamed Black Creek Village - range from $48,000 to $81,000, which the agency says is about 20 percent below the market value.

Although environmental groups say the neighborhood is still unsafe, revitalization agency officials repeatedly stress that the area is habitable.

``We describe it sometimes as the safest area in the city of Niagara Falls because we know more about it than any other area of the city ... or perhaps any other area of the country that's been affected by contamination,'' says William Broderick, the agency's executive director.

Love Canal was a typical close-knit middle-class neighborhood until the mid-1970s, when residents reported chemicals seeping into basements and yards. Toxic waste buried at the site in the early 1940s and 1950s by the Hooker Electrochemical Corporation - now Occidental Chemical Corporation - were resurfacing.

Residents complained of birth defects and health problems, and most left the site, where 21,800 tons of untreated hazardous waste remains buried. Some residents stayed, despite government offers to buy their homes.

Despite the extensive cleanup and testing, environmental groups contend that the neighborhood is still not safe to live in and have taken legal action to stop the sale of the homes.

Last week, a coalition of five environmental groups filed a motion in the state Supreme Court to prevent the lifting of a four-year-old injunction barring the sale of the homes. The Natural Resources Defense Council (NRDC), one of the groups, says the 1986 order requires a complete environmental-impact statement prior to selling the homes. NRDC attorney Rebecca Todd says the agency would be in ``contempt of court'' for selling the homes while the injunction stands. The revitalization agency, however, says it has met the conditions of the injunction.

Ms. Todd says it is up to a judge, not the agency, to determine compliance with the injunction. She says the agency's environmental-impact statement lacks adequate data on the health and safety risks of living in the area. In addition, she notes the recent discovery of nearby ``hot spots'' - areas where contamination is higher than expected.

Todd and other environmentalists say they are concerned that the standard of habitability for Love Canal homes will set a dangerous precedent for other hazardous-waste sites around the country. ``If habitability becomes safe here, it's safe everywhere,'' she says.

State environmental officials say they are confident about the $150 million cleanup and containment system at the site. The 16-acre dump where the chemicals are concentrated has been fenced in and cleared of houses. An underground clay wall and cap seals off chemicals, preventing them from penetrating beyond the site. Along with the state-of-the-art containment system, there is an on-site treatment plant and surrounding monitoring wells.

Potential Love Canal homebuyers will not receive written guarantees that the site will remain free of toxic-waste leaks. Neighborhood land tested by the state and federal government has been labeled ``habitable,'' though not ``safe.'' Environmentalists have criticized tests, which limit comparisons to surrounding communities - many of which are already located near hazardous-waste areas.

Such concerns do not bother people like Rose George, who looked at a house at 37 Mason Court. She says she has lived in Love Canal since 1969 and moved into an apartment six months ago. She is now looking for a larger home for her and her daughter.

``It doesn't bother me,'' she says. ``I never went to all those [neighborhood] meetings'' during the 1970s. ``I thought it was all a big farce.''

For Delford Rowh, however, the price is not right. The house that caught his interest costs $81,000. ``As far as I'm concerned, these houses are a little out of line,'' he says. ``I can go and do better elsewhere.''

A little further down on 98th Street, longtime Love Canal resident Sam Giarrizzo sits on the front steps of his home.

``Ever seen one of your neighbors you've known for 20, 30 years move out?'' he asks. ``I was scared just like everyone else at first.''

``I had to make up my mind. Should I go into debt and sell this house? I said: `I'll stick it out.' ''

Dressed in blue jeans and a white T-shirt, Mr. Giarrizzo proudly displays his garden in the backyard. ``So, I got a little garden and I keep eating these tomatoes,'' he says with a chuckle. ``They don't glow in the dark.''